Southern California Edison

To an outsourcing company, offering services to utilities to manage their motor vehicle fleets may seem like a simple economic proposition. "We can do it better and cheaper," the outsourcers say.

But it's not that easy. Thorny issues arise (em in economics, quality, administration, and labor relations. And they must be faced head on.

Few utilities today have avoided outsourcing one function or another in the effort to cut costs. Some utilities have been burned.

A few weeks ago I picked up a copy of one of those law firm newsletters, this one published quarterly by Reid & Priest, titled the Utility Telecommunications Advisor.

The Larger, the Better

In recent years, increased competition and the threat of deregulation have spurred numerous mergers and acquisitions. Fourteen mergers have been completed by investor-owned utilities (IOUs) over the last five years; seven more have been announced. If all of these mergers receive approval, nearly 20 percent of the IOUs that existed in 1990 will no longer exist.

With a CTC likely to cover stranded costs,

aggregators must somehow find power cheap

enough to offer real savings.

Retail aggregation: Wherever you stand, it appears 1998 could be the year of reckoning.

By then (em say those watching the future of aggregation in the "leader" states of California, New York, Massachusetts, and New Hampshire (em rulemakings will have sorted out the issues of stranded costs, distribution, and reliability.

California's retreat from its zero-emission targets eases the pressure on utilities, making time for a fresh look at public and private efforts.

Electric vehicles (EVs) hold interest for utility companies around the world.

they fit into a restructured industry?

Put 45 energy service companies (ESCos) into a $1-billion market, and they easily average over $20 million each. That's almost four dozen companies exploiting a niche an eighth the size of the microprocessor industry.

So it's easy to understand why new ESCos, half with utility roots, enter the fray weekly.

Standard & Poor's (S&P) plans to maintain negative outlooks on the three largest California electric utilities (em Southern California Edison (SCE), San Diego Gas & Electric (SDG&E), and Pacific Gas & Electric (PG&E). Although it considers the California Public Utilities Commission's (CPUC's) December 20 electric restructuring order "reasonably favorable," S&P will not reexamine the ratings until it is sure the plan will be finalized as proposed. S&P's concern is that some members of the California State Senate believe small customer interests would not be adequately protected.

SCEcorp has a new corporate structure and name: Edison International. It also has a new subsidiary, Edison Source, which specializes in solutions for energy efficiency, the environment, and energy marketing. Edison International now has five subsidiaries; its flagship, Southern California Edison, is the nation's second-largest IOU.

TECC Group, Inc. has identified 14 U.S. investor-owned electric utilities (IOUs) as major players in research and development (R&D), with expenditures in excess of $10 million. TECC's report, U.S. Electric IOU Research, Development & Demonstration Expense Comparisons 1994, places Southern California Edison at the top of the list ($64 million) and PECO Energy Co. 14th ($11 million). In between, in descending order, we find: Consolidated Edison Co.

You've heard talk lately about the convergence of electricity and natural gas. That idea has grown as commodity markets have matured for gas and emerged for bulk power.

But some economists take a different view. They see the real convergence occurring between electricity and telecommunications. I'm not talking about the "smart house" or fiber-to-the-whatever. Instead, how is the product is created?